The market research company in Nuremberg forecast today
that its consumer-sentiment index, based on a survey of about
2,000 people, will remain at 5.9 next month. The last time the
index was higher was when it reached 6 in March last year.
Economist predicted a decline to 5.8, according to the median of
25 estimates in a Bloomberg News survey.

Unemployment at a two-decade low of 6.8 percent, higher
wages and a waning desire to save are boosting household
purchasing power even as Europe’s sovereign debt crisis curbs
economic growth. Business confidence fell for a fourth straight
month in August, the Ifo institute said yesterday.

“German consumers’ fears of a noticeable weakening of the
economy continued to rise in August,” GfK said in a statement.
Still, “a stable job market and the comparatively high wage
agreements compared to previous years are proving to be positive
factors encouraging major purchases,” and “the inclination to
save is also currently regressive,” it said.

While a gauge of economic expectations dropped to minus
18.9 in August from minus 5.6 in July, an index measuring
consumers’ willingness to spend eased just 2.7 points to 33.1,
GfK said. A measure of income expectations declined to 31.6 from
36.3.

Metro AG, Germany’s biggest retailer, on July 31 posted
second-quarter profit that beat analysts’ estimates as sales
rose in its home market and at its Cash & Carry and Media-Saturn
units.

Consumer spending rose 0.4 percent in the second quarter
from the first, a breakdown of gross domestic product showed
Aug. 23. That helped the economy grow 0.3 percent in the
quarter.

“Private consumption continues to be an important prop for
Germany’s economy,” GfK said. “Private consumption is likely
to rise by around 1 percent in real terms this year.”